In the most recent CBS News poll, the public was split on which party will do a “better job” on the economy, with Democrats at 42% and Republicans at 41%.
This should help break the tie.
Who to hold accountable for the economy is complicated by the fact that for the last three-and-a-half years government is at a bipartisan stalemate. President Obama and the Democrats can’t invest as much as they like in infrastructure, energy and education. Republicans can’t slash spending as deep as they would like or deregulate corporations at all.
Still, the totality of the Obama presidency tilts in a Keynesian direction, thanks to the Recovery Act (the “stimulus”) and the Affordable Care Act (“Obamacare”). Factor in the repeal of the heart of the Bush tax cuts and Obama’s executive authority to regulate business, and you get an overall record liberal enough to answer the question: what has been better for the economy, Barack Obama’s liberalism or George W. Bush’s conservatism?
And if we can answer that question, we can decide in what general direction should we go to accelerate the economic recovery.
Let’s start with the big one: jobs. And let’s make it fair to Republicans and only look at private sector job creation — no Democratic cheating by putting all the unemployed on the government payroll!
Bush vs. Obama: Private Sector Job Creation
Bush lost private sector jobs over the course of his eight years (the Wall Street Journal declared it the “Worst Track Record On Record” on jobs), while Obama has created a net of nearly 6 million private sector jobs during his presidency, and close to 9 million if you start counting after the Great Recession Bush handed Obama technically ended in mid-2009.
Bush vs. Obama: Unemployment Rate
Similarly, while Bush’s policies drove up the unemployment rate, Obama’s has pushed it down.
The above, like the other line chart below, is a simplified graph that removes all month-to-month fluctuation during their presidencies, to clarify the bottom line.
Now sometimes reductions in the unemployment rate are dismissed, because the lower percentage comes from unemployed people giving up and leaving the workforce instead of getting a job. In turn, analysts often look at the “employment-population ratio” to see what percent of our population is actually working. But the steady increase in job creation over the last year has begun to lift the employment-population ratio as well.
Under Bush, the employment-population ratio dropped 3.8 percentage points, from 64.4% to 60.6%. Under Obama, it fell another 2.4 percentage points as of last October, but since has risen 0.8 to 59%.
Again, Obama’s overall record bests Bush’s … lest you thought Bush’s near-doubling of the unemployment rate was due to millions of people rushing to get back into the job hunt.
Bush vs. Obama: Corporate Profits
It may seem off-base to look at corporate profits when the middle class is still struggling. Median household income was down 4.2% on Bush’s watch and then another 4.9% during Obama’s first term, though we don’t have those numbers for 2013 and 2014 yet. According to a 2013 report from the Economic Policy Institute, by one measure wages only grew 2.4% between 2000 and 2007, under Bush yet before the crash, then have basically stayed flat since. The one silver lining is that inflation has been lower under Obama than Bush, so at least flat wages aren’t losing purchasing power.
With stagnant wages in mind, the giant rebound for corporate profits after the crash is a glaring example of our inequality crisis. Yet at the same time, the numbers show that President Obama’s stimulus and regulatory zeal have created healthy conditions for businesses to thrive (and that whiny right-wing CEOs should clam up and count their blessings). The conservative charge, that government spending and regulation is bad for business, is bunk.
The problem we need to solve in order for the economic recovery to truly take off is how we create an economy in which employees share the success they have helped provide to their employers.
It may be true that we have not solved this deeply difficult problem during the Obama presidency. But considering that under Bush, corporations did worse than under Obama, household income still fell and private sector jobs were lost, perhaps conservative economic policies should not be our North Star.